Who made America the global sheriff — and judge and jury?

Does the US have a legitimate right to intervene in the behaviour of companies and individuals, or indeed of countries, operating beyond its own borders?

The question is pertinent and timely, given that Standard Chartered, a UK bank, was accused this week of violating US law.

Not, that is, as a result of the bank’s relatively limited activities in America…

The case is just the latest example of how the US has been extending its so-called extraterritorial powers in recent years – where the US has been flexing its legal muscle outside its own territory.

“The issue boils down to the following concept,” says Jacob Frenkel…”Any sovereign, whether a country, province, state or municipality, has a right to expect that a company or person doing business in that territory is subject to the laws of that territory.

“Just as a party doing business enjoys the protection of the laws, so too must a party comply with the laws.”

That definition raises two further questions. First, how should “doing business in that territory” be defined? In other words, when is an individual or firm deemed to be doing business in the US?

It does not take much, according to David Pitofsky…”As long as dollars are involved, they will eventually touch a US institution,” he says, referring to how almost all banking transactions, particularly in US dollars, will at some point in the process flow through the Federal Reserve Bank in New York.

Our courts have made clear over the years that such flows of funds through New York is sufficient for asserting jurisdiction.

“Even if a transaction is done, say, in Japanese yen, if a blip in the system turns these into dollars – however briefly – that in theory could mean it falls under US law,” says Mr Pitofsky.

RTFA. Longish, wandering through the labyrinth of self-serving decisions woven through the fabric of our law, courts and financial institutions. Patents, Dodd-Frank’s extra-territorial jurisdiction, DOJ jurisdiction over anti-corruption law, online gambling based in foreign countries, lack of reciprocity — topic after topic that American politicians have deemed subservient to the will of American courts and government institutions regardless of location.

The New York State Department of Financial Services, which is the regulator that accused Standard Chartered of [gasp] exchanging Petrodollars for Iran – is just 10 months old and claims the right to supervise 4,500 foreign and domestic institutions. Says our government, says our politicians. And probably most American voters who think we have a biblical right to rule the world.